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South Asia Investor Review is focused on reporting, analyzing and discussing the economy and the financial markets of countries in South Asia, including Pakistan, Bangladesh and Sri Lanka. For investors looking to invest in emerging markets beyond BRIC countries (Brazil, Russia, India and China), this blog is designed to help international investors looking to learn about investing in South Asia with focus on Pakistan. Riaz has another blog called Haq's Musings at http://www.riazhaq.com

Did Musharraf Steal People's Money in Pakistan?

A story alleging corruption by former President Pervez Musharraf has appeared recently in Pakistan's Jang Media Group publications in the aftermath of the Panama Leaks that revealed the names of 220 rich and powerful Pakistanis owning offshore accounts.

The Panama Papers show that Mir Shakeel ur Rehman, the owner of Jang Media Group, owns offshore accounts, as do the family of the current Prime Minister Mr. Nawaz Sharif and former Pakistani Prime Minister Benazir Bhutto who was assassinated in 2007. Other Pakistanis named in the Panama Papers include prominent businessmen, politicians, judges, bureaucrats, etc. allegedly involved in corruption. The names of former President Pervez Musharraf or his family members are not among the 220 names from Pakistan.

The Jang Media Group story titled "How Mr clean Musharraf became a billionaire" lists accounts held by Mr. Musharraf in Dubai and London with balances adding up to millions of US dollars. Farrukh Durrani, the story writer, demands that the commission of inquiry looking into Panama Papers also investigate the sources of Mr. Musharraf's wealth. Here's an excerpt of the story:

"Despite having such huge chunk of amount in his offshore accounts, neither did any investigative agency nor did the accountability bureau question him how he got billions of rupees in his foreign accounts. However the commission of inquiry appointed by prime minister in the wake of Panama Leaks has a broader scope and powers which can question ex-dictator Pervez Musharraf from where he got billions of rupees which are kept in his offshore accounts."

Knowing what I know about how western leaders like former US President Clinton and his wife Hillary became wealthy after leaving office, let me suggest to Mr. Durrani to do his homework as follows:

1. Learn about the lucrative speaker series business which brings hundreds of thousands of dollars per speech to celebrity speakers in the West, particularly the United States. This is a well-established, well-organized business that promotes lecture series featuring prominent speakers where attendees pay hundreds of dollars per person to attend in large numbers.

2. Do research into how many such lectures President Musharraf delivered after retiring from presidency in 2008? How much did he get paid for each? What does it all add up to? Does it add up to more than the reported account balances in Dubai and London?

Let me give a few pointers to Mr. Durrani if he's honestly trying to understand the sources of Mr. Musharraf's wealth:

1. A Newsweek story quoted David Wheeler, President of Embark LLC, just one of the international public-relations firms trying to land Musharraf as a highly paid keynote speaker, as saying, "The [speaking] fee for Musharraf would be in the $150,000-200,000 range for a day."

2. The Newsweek story further added that "Public-relations executives say the articulate and brash 44-year army veteran's earning power could approach that of former U.S. President Bill Clinton".

3. Here's how an Oregon newspaper "The Oregonian" reported about Musharraf's planned appearance in Portland in 2010: "The folks who attract big international names to Portland each year have done it again, landing Pervez Musharraf, Pakistan's former president, to speak here in March. The World Affairs Council of Oregon's 2010 speaker series will also feature Nobel Prize-winning economist Joseph Stiglitz; Jane Lubchenco, National Oceanographic and Atmospheric Administration chief administrator; and -- in a face-off --Howard Dean, former chairman of the Democratic National Committee, and Karl Rove, strategist for President George W. Bush."

4. A brochure announcing the Peninsula Speaker Series in the San Francisco Bay Area that included Musharraf as a featured speaker, along with Condeleeza Rice, Laura Tyson and Paul Krugman, showed the ticket prices ranging from $294 to $403 per person.

After Mr. Durrani has had a chance to do his homework, I believe he will realize, if he's honest, that he is being used by his employer to deflect attention of the world and of any investigative commission members from the sins of Mir Shakeel ur Rahman and his rich and powerful friends in high places, including Prime Minister Nawaz Sharif and his family, who have either stolen Pakistan peoples' money and/or cheated on taxes they owe to the Pakistani treasury. Any investigative commission must not allow itself to be used to pursue vendettas to obscure the truth.

Comments

The confessional statement of Senator Ishaq Dar was recorded before a district magistrate in Lahore. He was brought to the court from a jail by Basharat Shahzad, who was then serving as assistant director in the Federal Investigation Agency (FIA).

According to legal experts, the senator's deposition was an 'irrevocable statement' as had been recorded under section 164 of the Criminal Procedure Code (CrPC).

Senator Ishaq Dar has always been regarded as one of the closest aides of the Sharif family, and is now also a relative as his son is married to Nawaz Sharif's younger daughter.

However, the NAB record clearly shows that back in 2000 he had agreed to give a written statement against the Sharifs about their alleged involvement in money laundering.

The top PML-N leaders had hit a rough patch by then as some of their lieutenants were busy developing a new political system for Gen Pervez Musharraf after his Oct 1999 military coup.

In the statement, Ishaq Dar accused Nawaz and Shahbaz Sharif of money laundering in the Hudaibiya Paper Mills case. At one point in the 43-page statement, Mr Dar said that on the instructions of Mian Nawaz Sharif and Shahbaz Sharif, “I opened two foreign currency accounts in the name of Sikandara Masood Qazi and Talat Masood Qazi with the foreign currency funds provided by the Sharif family in the Bank of America by signing as Sikandara Masood Qazi and Talat Masood Qazi”.

He said that all instructions to the bank in the name of these two persons were signed by him under the orders of “original depositors”, namely Mian Nawaz Sharif and Mian Shahbaz Sharif.

“The foreign currency accounts of Nuzhat Gohar and Kashif Masood Qazi were opened in Bank of America by Naeem Mehmood under my instructions (based on instructions of Sharifs) by signing the same as Nuzhat Gohar and Kashif Masood Qazi.”

The document shows Dar stated that besides these foreign currency accounts, a previously opened foreign currency account of Saeed Ahmed, a former director of First Hajvari Modaraba Co and close friend of Dar, and of Mussa Ghani, the nephew of Dar's wife, were also used to deposit huge foreign currency funds provided by “the Sharif family” to offer them as collateral to obtain different direct and indirect credit lines.

Senator Dar had disclosed that the Bank of America, Citibank, Atlas Investment Bank, Al Barka Bank and Al Towfeeq Investment Bank were used under the instructions of the Sharif family.

Interestingly enough, Ishaq Dar also implicated himself by confessing in court that he — along with his friends Kamal Qureshi and Naeem Mehmood — had opened fake foreign currency accounts in different international banks.

Mr Dar said an amount of $3.725 million in Emirates Bank, $ 8.539 million in Al Faysal Bank and $2.622 million were later transferred in the accounts of the accounts Hudaibya Paper Mills.

He said that the entire amount in these banks finally landed in the accounts of the paper mills.

The Hudaibiya Paper Mills case is still pending in the National Accountability Bureau.

If it is opened again, the Sharif brothers may be in for a rude shock a confidant is to blame for the albatross around their necks.

Pakistan's government has banned a film about endemic corruption in its judiciary, law enforcement and political class, claiming it could promote violence.

The decision to censor Maalik has led to increased demand for the film in the black market, with many Pakistanis curious to know why it provoked the ire of politicians.

Pakistan is considered one of the most corrupt countries in the world, placing 117th out of 175 countries, according to the 2015 Corruption Perceptions Index put together by Transparency International.

Many Pakistanis told Al Jazeera they looked forward to watching Maalik and suggested the government's made its decision because the film's themes struck too close to home.

"Movies are for entertainment purposes ... they deliver a message to the public," Kashmala Qureshi, a student, said.

"If it is made on the basis of corruption and the government feels threatened by the movie, it means that they are guilty from inside."

One of Maalik's actors, Arif Khan, said the filmmakers had set out to expose the underbelly of corruption that exists within the country.

He said banning the film would only increase its appeal.

Ashir Azeem, who directed Maalik, told Al Jazeera that politicians were concerned with their image internationally and trying to censor anything that cast them in bad light.

"Authorities in Pakistan are very concerned with how they are perceived, especially abroad," Azeem said.

"Whereas this might be considered an overreaction in some countries, it has become the go-to method for the authorities to ban content they deem offensive or controversial."

The controversy surrounding the film comes just weeks after leaked documents revealed that Nawaz Sharif, Pakistan's prime minister, stashed huge sums of money in offshore accounts.

Senior journalist Shaheen Sehbai has revealed that he was not shown the report in which the newspaper purported that the International Council for Investigative Journalists (ICIJ) mistakenly included Prime Minister Nawaz Sharif’s name in the Panama Papers, before it was filed.

Speaking to a panel comprising Express News anchors Imran Khan and Gharida Farooqi, and Daily Express Group Editor Ayaz Khan after resigning as the group editor of The News on Saturday, Sehbai said his reports at The News were radically changed without his permission.

According to Sehbai, the CEO and group editor-in-chief of the Jang Group, Mir Shakeelur Rehman, was waging a battle for ‘civilian ascendancy’. He said Jang Group’s ‘Aman Ki Asha’ initiative was considered a bad move among military circles, but “we insistedthat all this was done with full knowledge of the military leadership”.

“We were ashamed of certain decisions taken by my organisation and I now realise that the Jang Group promoted its own perception and angled all news according to its own need,” Sehbai said. He added that the Jang Group was facing a lot of issues for a very long time.

Sehbai said the most recent difference between him and the Jang Group cropped up when the latter ran a story claiming that ICIJ had included Premier Nawaz’s name in the Panama Papers by mistake. “My objection on this issue was that I was neither consulted nor shown the report before publishing it,” the veteran journalist said.

“I was not told about this report at all. Such moves usually took place after midnight and usually orders from the top were accompanied by ‘suggestions’ about which news was to be accommodated where in the newspaper,” he added.

The news report in question, according to Sehbai, was just a ‘one-liner’ correction which was followed by a letter from Daniyal Aziz and was arranged in the shape of a news report.

Things were micromanaged at his previous organisation, he said, adding that orders from the top usually not only included ‘hints’ at placement of even single-column news items, but also which report was to be radically edited too.

“When editors reviewed the newspaper in the morning, they realised just how much of their news reports made it in the paper and how much they were edited out.”

Sehbai said that while Mir Shakeel claimed he was waging a battle for civilian ascendancy, “I was ashamed of the way my previous employer came out in defence of the current government.”

“Owners of the Jang Group have a clear-cut view on what sort of news reports and editorials are to appear in their newspaper. They view everything in accordance with their own perspective and print newspaper in line with their own view point every day. Everything is determined by the group’s owners,” he said.

“Over the past two years, I had been facing a number of issues with the group owners. When the incident involving Hamid Mir occurred, I was with Mir Shakeelur Rehman in Dubai and I advised him not to adopt such an aggressive posture, but he said that a clash between the military and civilians is bound to happen and that I should not interfere,” Sehbai said.

“And everyone witnessed whatever happened afterwards. My differences on policy matters began from that time, I kept telling him not to pursue the course of action he had chosen. The mind of Mir Shakeelur Rehman may contain a host of disparate agendas, but he had some views of his own too,” he added.

“When I joined Jang Group, talks were going on for the ‘Aman Ki Asha’ project and some people from the Times of India visited us. At that time, I explicitly told them that I would not join this effort,” the veteran journalist said.

According to Sehbai, the restriction on Geo transmission during the Musharraf regime and Hamid Mir’s attack haunted Mir Shakeelur Rehman’s mind.

ISLAMABAD: As the much-awaited list of Pakistanis owning offshore companies is released today, the close associates of politicians and families of celebrities are set to capture more attention than the businessmen including those who registered companies only to open accounts in Swiss banks.

Identities of some of the high-profile figures suspected to be linked with offshore companies are still being ascertained and will therefore be published after a complete investigation.

The list to be released by The News will be the most comprehensive as painstaking efforts were made to find the last Pakistani buried in the 11.5 million files of the Panama Papers shared by the International Consortium of Investigative Journalists (ICIJ). Nevertheless, it can’t be claimed with confidence that all of them have been fished out.

Right from the family of Zulfi Bokhari, a key financier of Imran Khan, to Irfan Puri, an oil czar equally close to the PPP/MQM leadership and presently in Dubai jail; from Tariq Islam, a cousin of Benazir Bhutto, to the son of former health minister Naseer Khan; from the family of famous Seth Abid to the son of Admiral (retd) Muzaffar Hassan; and from the Port Qasim Authority’s former MD and NRO beneficiary Abdul Sattar Dero to the former president of Karachi chamber of commerce, Shaukat Ahmed, are in the list.

Mother of Oscar award winner, Sharmeen Obaid-Chinoy; a billionaire owner of Sachal studio Izzat Majeed; wife of Ghous Akbar; and fashion designer Zehra Valliani along with her brother, an asset manager, Fawaz Valliani have also been identified as owners of offshore companies.

Wamiq Zuberi of the Business Recorder and his wife, former PPP senator Rukhsana Zuberi, have been identified among those invested in an offshore company, a fact Wamiq acknowledged. He explained that they stopped investing after being defrauded and that the company was owned by somebody else who was murdered in Islamabad.

Although Abdul Aleem Khan of the PTI has been claiming with confidence that he didn’t figure in the Panama Papers and The News story about his offshore company was based on his assets declarations, his name is very much in the record.

As far as Sayed Zulfikar Abbas Bokhari (Zulfi Bokhari) is concerned, he has been identified in connection with the offshore companies he own along with his two sisters. There are six companies owned by Zulfi family: K-Factor Limited, Bradbury Resources Ltd, Bayteck Limited, Bayla Trading Limited, Poreim Trading Limited and Ganstam Trading Limited. They could have gone unnoticed had one of his sisters not given address of Islamabad. Probe indicates the house is owned by Zulfi family. Address in London is of Zulfi’s house. Wajid Bokhari, Zulfi’s father, was caretaker minister in the interim setup installed for holding 2008 elections. One of his uncles is sitting PTI MPA from Attock.

Well, there are several forms of front companies. In the most basic sense, it's a company that is created to hide assets or to give the appearance of having a functional business. They're also - you can have a foundation, which is a version of that that's a little more secretive. The key to a lot of these companies is the ability to hide true ownership, that you have directors, who aren't the real owners of the company, named. I think that's really the big thing that distinguishes them.

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Well, some of the legitimate reasons would run the gamut from real estate transfers - if you're purchasing property, say, in Panama - because it was easier to transfer that property to another. And then there are transfer taxes that you don't have to pay. So there's a financial gain in doing it this way, but it's also ease in property transfer. That would be one aspect. Another might be estate planning. Maybe you don't like the estate tax in the United States. And you keep certain assets overseas, and you try to find ways to pass on inheritance without going through the U.S. tax system. That would be another.

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There is a gray area. And as we found in the documents, people go right up to the end as close as they can. And of course, U.S. tax law has been modified so much since the Reagan era that all of these loopholes have been written into it specifically to kind of get around some of these laws.

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Well, I think the key thing is the money is still the important part. The law firm isn't necessarily involved in any way with the money. And that's what's been so frustrating because you're looking at what are called company formation documents. This company sets up a shell company in the Seychelles or British Anguilla, places like that. You don't actually, in most cases, see the money. You don't know where that money is. You presume the money is in Liechtenstein or Luxembourg or Switzerland. And with the U.S. crackdown on UBS and HSBC and the Swiss banks, it's driven I think more people into this offshore world if they're looking to camouflage that money they have back in Switzerland.

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What's so interesting about this company Mossack Fonseca is the kind of menu of options they provide. They can just simply create a company for you. They can create what's called a private enterprise foundation. They can help you get a Panamanian visa if you either purchase property or invest in Panama. It gets as complex as going into derivatives trading. We've found some evidence that they actually help customers, place them into derivatives trading in real complex securities.

They have an asset management arm. They have a mail forwarding service. They also provide - if you want to have the appearance of being a legitimate brick-and-mortar company, they'll provide you a website, a phone number, an office suite, everything to make it look like you're a legitimate brick-and-mortar company.------

Right, those are called shelf companies, as opposed to shell companies. And a shelf company is ready to roll. They're offered in the United States too. And sometimes, a legitimate use of one of these might be you're purchasing - one American company is buying another American company. And they need to do it quick. And they're going to incorporate in Nevada or Wyoming or, you know, pick your state. That would be a legitimate use. It's already ready to go. You don't have to wait seven days. You complete the transaction, and you're ready to roll.

Contrary to the government claims of clamping down on money launderers and tax evaders, Pakistan’s laws facilitate money laundering and tax evasion in a legal manner, tying the hands of the authorities and preventing any tangible action against the culprits.

Over $9 billion are illegally remitted outside Pakistan, according to an October 2013 statement of the then governor of the State Bank of Pakistan (SBP), Yaseen Anwar. No estimates of the money transferred abroad through foreign currency accounts, opened and protected under the Protection of Economic Reforms Act 1992, are available.

Interestingly, Nawaz Sharif had enacted this law during his first stint as prime minister. After its enactment, industrialists and politicians whitened their illegal money, according to court records and statements of that period.

Sections 5 and 9 of the Protection of Economic Reforms Act, 1992 and Section 111(4) of the Income Tax Ordinance, 2001 guarantee complete immunity.

The Protection of Economic Reforms Act was passed in July 1992 for “creating a liberal environment for savings and investments and to create confidence in the establishment and continuity of liberal economic policies”. Before the passage of this act, the country had a controlled regime of foreign exchange. The government had de-regularised investment, banking, finance, exchange and payment system and holding and transfer of currencies.

“All citizens of Pakistan resident in Pakistan or outside Pakistan and all other persons shall be entitled and free to bring, hold, sell, transfer and takeout foreign exchange within or out of Pakistan in any form and shall not be required to make a foreign currency declaration at any stage nor shall anyone be questioned in regard to the same,” says Section 4 of the act.

PM Nawaz visits Gilani House to garner support on Panama leaks

Clause 5 grants complete immunity to foreign currency accounts holders against any inquiry from the Income Tax Department about the source of financing of foreign currency accounts. The balances in the foreign currency accounts also remain exempted from levy of wealth tax and income tax and compulsory deduction of Zakat at source. It also ensures complete secrecy. Even the central bank cannot impose restrictions on these accounts.

However, in December 1999, then president Muhammad Rafiq Tarar promulgated an ordinance to bring an amendment that withdrew immunity from inquiries to citizens of Pakistan residing in Pakistan in respect of any balance in new foreign currency accounts opened after December 16, 1999.

Similarly, Section 111 (4) of the income tax law is facilitating whitening of illegal money through foreign remittances. According to rough estimates, one-fifth of about $19 billion foreign remittances are domestically generated black money that is being whitened under Section 111-4 of the Income Tax Ordinance.

Pakistan cannot prosper without eradicating corruption, says Imran

In the presence of these legal lacunas, no judicial commission can establish anything against any accused named in the Panama leaks, according to tax experts.

This is the first time in the last three years that the funds linked to Pakistan in Swiss banks have exceeded that of Indians.In case of China, the total funds declined from CHF 8.16 billion to CHF 7.4 billion. A number of other major countries also saw their funds falling in Swiss banks amid a global clampdown against the erstwhile banking secrecy walls in the Alpine nation.The money of US clients in Swiss banks fell to CHF 195 billion in 2015, from CHF 244 billion a year ago, though the same for the UK clients surprisingly rose from CHF 321 billion to CHF 345 billion.However, these official figures disclosed by SNB do not include the money that the foreign clients of Swiss banks might have kept in the name of shadow entities or shell companies.Also, these figures do not indicate towards the quantum of alleged black money, which has been a matter of a major political debate in various countries including India and Pakistan.As per the SNB data, the total funds linked to Pakistan in Swiss banks stood at a record high level of CHF 3.43 billion in the year 2001, but has come down considerably since then.By 2013, it fell to as low as CHF 1.23 billion, the lowest since 1996 since when this data is available. However, it has risen by 6 per cent and 16 per cent during the last two years 2014 and 2015, respectively.In case of India, the quantum of such funds has fallen in the last two years.

This included funds amounting to CHF 1,477 million held directly by Pakistani nationals and entities and CHF 36 million through fiduciaries or wealth managers.

This is the second straight year of rise in Pakistan- linked funds in Swiss banks, while the same for India has fallen for the second consecutive year and stood at CHF 1,217 million (Rs 8,392 crore) at the end of 2015 - a decline of 33 per cent.

This is the first time in the last three years that the funds linked ..

As per the SNB data, the total funds linked to Pakistan in Swiss banks stood at a record high level of CHF 3.43 billion in the year 2001, but has come down considerably since then.

By 2013, it fell to as low as CHF 1.23 billion, the lowest since 1996 since when this data is available. However, it has risen by 6 per cent and 16 per cent during the last two years 2014 and 2015, respectively.

In case of India, the quantum of such funds has fallen in the last two years.

Read more at:http://economictimes.indiatimes.com/articleshow/52991078.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Pakistan’s rich love London, New York, and Dubai more than Karachi – when it comes to investing and partying with their money, that is.

That’s according to the former director of United Nations Development Programme (UNDP) for Pakistan, Marc-André Franche.

“You cannot have an elite that takes advantage of very cheap and uneducated labour when it comes to making money, and when it is time to party it is found in London, and when it’s time to buy things it is in Dubai, and when it’s time to buy property it invests in Dubai or Europe or New York. The elite needs to decide do they want a country or not,” Franche stated in an interview last month with the Business Recorder.

Franche’s comments come as Pakistan’s equity markets have been rallying, beating neighboring Indian and Chinese equity markets, as discussed in a previous piece here.

To be fair to Pakistan’s elite, investing in a country with such high corruption levels is almost an impossible task. Pakistan is ranked 117 in the Corruption Index, well behind neighboring India–see table.

Still, the attitude of Pakistan’s elite towards their own economy raises serious questions about the sustainability of the recent equity market rally, and the wisdom of foreign capital pouring into Pakistan, either in the form of investment or official assistance, when the money of rich Pakistanis heads in the other direction.

Investors who have been following frontier markets long enough have seen this show before – in Nigeria, Peru, and Colombia, as one commentator in a previous piece I did on Pakistan observes. I would add Argentina, which has been a frontier market several times in the past, to the list – as well as the Philippines, Mexico, and so on.

Justice Khosa "onus of proof of the money trail of London flats lies on shoulders of #Sharif family" #Panamagate http://timesofindia.indiatimes.com/world/pakistan/panamagate-case-pakistan-sc-asks-pm-nawaz-sharif-to-establish-ownership-of-london-flats/articleshow/56377505.cms The court on Friday cautioned Prime Minister Sharif and his family that if they were unable to establish the ownership of flats in London, the court would have to "imagine" that the petitioners claim was true. The top court made the remarks during the hearing of the case for the third consecutive day. In the Panama papers leak case hearing, the Pakistan Supreme Court on Friday asked Prime Minister Nawaz Sharif and his siblings to come out clean on the ownership details of the London flats which are not shown in their wealth statement.Last year in April, the leak of 11 million documents held by the Panama-based law firm Mossack Fonseca revealed nexus between several corrupt politicians and businesses around the world. Among them was the Prime Minister Nawaz Sharif's family too.The Panama leaks revealed that Sharif's children owned offshore companies and assets not mentioned in his family's wealth statement. The companies, according to the leaked papers, were used to launder illegal wealth and to acquire foreign assets, including some apartments in London's Mayfair area.

In its section on Pakistan, the report notes: “The Altaf Khanani money laundering organisation (Khanani MLO) is based in Pakistan. The group, which was designated a transnational organised crime group by the United States in November 2015, facilitates illicit money movement between, among others, Pakistan, the United Arab Emirates (UAE), United States, UK, Canada, and Australia.”

The group “is responsible for laundering billions of dollars in organised crime proceeds annually. The Khanani MLO offers money laundering services to a diverse clientele, including Chinese, Colombian, and Mexican organised crime groups and individuals associated with designated terrorist organisations”, the report adds.

It describes Pakistan as strategically located country at the nexus of south, central and western Asia, with a coastline along the Arabian Sea. The report notes that Pakistan’s porous borders with Afghanistan, Iran and China facilitate the smuggling of narcotics and contraband to overseas markets.

“There is a substantial demand for money laundering and illicit financial services due to the country’s black market economy and challenging security environment.”

The report notes that money laundering in Pakistan affects both the formal and informal financial systems. Pakistan does not have firm control of its borders, which facilitates the flow of illicit goods and monies into and out of Pakistan.

The report, however, acknowledges that most Pakistanis living abroad use legal channels for sending money home. From January to December 2016, the Pakistani diaspora remitted $19.7 billion back to Pakistan via the formal banking sector, up by 2.3 per cent from 2015.

The report notes that while it is illegal to operate a hawala without a licence in Pakistan, the practice remains prevalent because of poor ongoing supervision efforts and a lack of penalties levied against illegally operating businesses. “Unlicensed hawala/hundi operators are also common throughout the broader region and are widely used to transfer and launder illicit money through neighbouring countries,” the report adds.

The report says that criminals exploit import/export firms, front businesses and the charitable sector to carry out their activities. Pakistan’s real estate sector is another common money laundering vehicle, since real estate transactions tend to be poorly documented and cash-based, it adds.

The report notes that in January 2015, Pakistan launched the National Action Plan (NAP), addressing primarily counter-terrorist financing. The government’s implementation of the NAP “has yielded mixed results, which is in part due to the lack of institutional capacity as well as political will,” the report adds.

“Unlicensed hawaladars continue to operate illegally throughout

Pakistan, particularly in Peshawar and Karachi, though under the NAP Pakistan has reportedly been pursuing illegal hawala/hundi dealers and exchange houses.”

"Significant gap/disparity among the known and declared sources of income and the wealth accumulated by the Respondent No. 1, 6, 7 and 8 have been observed," said the investigation team in its closing remarks.

“The financial structure and health of the companies in Pakistan having linkages to the Respondents also do not substantiate the wealth of Respondents,” added the document.

"Moreover, irregular movement of huge amounts in shape of loans and gifts from Kingdom of Saudi Arabia-based company (Hill Metals Establishment), United Kingdom based companies (Flagship Investments Limited and others) and United Arab Emirates based Company (Capital FZE) to Respondent No. 1, Respondent No. 7 and Pakistan based companies of Respondent No. 1 and family have been highlighted."

"The role of off-shore companies is critically important as several offshore companies [companies mentioned by name] have been identified to be linked with their businesses in UK while conducting this investigation. These companies were mainly used for inflow of funds into UK based companies; which not only acquired expensive properties in UK from such funds but also revolve these funds amongst their companies of UK, KSA, UAE and Pakistan."

"In addition to the companies, Respondent No. 1 and 7 have been found to be recipients of these funds movement into Pakistan as gifts/loans whose purpose/reason have not justified by them before the JIT. Needless to say, these UK companies were loss-making entities with heavily engaged in revolving of funds vis-a-vis creating a smoke screen that the expensive properties of UK were due to the business operations of these UK companies," added the closing remarks.

The investigative team refers to Section 9(a)(v) of the National Accountability Ordinance, 1999 in its report, which states - "A holder of public office, or any other person, is said to commit or to have committed the offence of corruption and corrupt practices [....] if he or any of his dependents or benamidars owns and possesses or has acquired right or title to any assets or holds irrevocable power of attorney in respect of any assets or pecuniary resources disproportionate to his known sources of income, which he cannot reasonably account for or maintains a standard of assets beyond that which is commensurate with his sources of income...."

"In any trial of an offence punishable under clause (v) of sub-section (a) of Section 9 of this Ordinance, the fact that the accused person on his behalf, is in possession for which the accused person cannot satisfactorily account, of assets and pecuniary resources disproportionate to his known sources of income, or that such person has, at or about the time of the commission of the offence with which he is charged, obtained an accretion to his pecuniary resources or property for which he cannot satisfactorily account, the Court shall presume, unless the contrary is proved, that the accused person is guilty of the offence of corruption and corrupt practices and his conviction therefore shall not be invalid by reason only that it is based solely on such presumption," states Section 14(c) of the National Accountability Ordinance, 1999, which was also brought forth by the report.

In their report, which has been leaked to media, the team alleges Sharif's family accumulated wealth far above its earnings, and says his children, including heir-apparent Maryam Sharif, signed falsified documents designed to mask the truth.

Opposition leader Imran Khan said Sharif had "lost all moral authority" and must resign immediately.

But Sharif's allies dismissed all the allegations against him and the report.

"It's trash," said Defence Minister Asif Khawaja, adding that the report was "full of flaws".

Sharif, the son of an industrialist, has denied wrongdoing and said his family's wealth was acquired legally.

In April, the Supreme Court ruled that there was insufficient evidence to remove Sharif from office - by a split 2-3 verdict - but it ordered further investigations, which the JIT was set up to carry out.

Sharif's daughter Maryam was not available for comment but she also dismissed the report in a post on Twitter.

"JIT report REJECTED. Every contradiction will not only be contested but decimated in SC," she wrote, referring to the Supreme Court.

The investigation has spooked investors in Pakistan's equity market, with the benchmark index in retreat since June over fears Sharif's removal would plunge Pakistan back into chaos after years of relative stability.

The index opened sharply lower on Tuesday and fell 4.65 percent by the close to end at 44,120.58.

"After this JIT report, the prime minister’s position has weakened and becomes unpredictable. He may have to leave," Talat Masood, a political analyst, told Reuters.

'VOLATILITY EXPECTED'

Pakistan has for decades been plagued by rivalry between the military and civilian politicians and by pervasive graft.

Sharif was originally nurtured by the military and served as prime minister twice in the 1990s before he himself was ousted in a 1999 coup leading to a decade of exile.

He won a third term as prime minister in a 2013 election. Since then, periods of tension between him and the powerful military have led to questions about his prospects.

His brother, Shabaz Sharif, is chief minister of Punjab, Pakistan's most populous and economically and politically most important province.

The team in its 254-page report alleges the family's businesses alone are not enough to explain its wealth, which includes upscale London flats.

The team recommended the anti-corruption National Accountancy Bureau (NAB) file a case against Sharif, according to a copy of the report seen by Reuters, as well as reporting by Dawn newspaper and other media.

That would likely undermine investor confidence even more.

"The market has taken the suggestions of an NAB investigation and the overall JIT report as a negative," said Saad Hashmey, research director at brokerage Topline Securities.

"We expect volatility," he said.

The Supreme Court will decide how to proceed and whether to call for a trial.

Sharif's term expires in June 2018 and elections are expected two months later. If he were forced to step down, his ruling PML-N party can appoint a new prime minister until the elections.

The JIT team is made up of civilians and members of military agencies, including the military's main Inter-Services Intelligence agency.

"Throughout the 1990s, during two periods of rule by Sharifs and two by his archrial Benazir Bhutto, the privatization process became a game of grab and run. Investing of investing in solid projects, many business groups colluded with corrupt officials to make quick profits. They borrowed huge sums (from state-owned banks) without collateral, created and dissolved ghost factories, purchased state assets at token prices, avoided paying taxes, defaulted on shaky loans, or deferred paying them indefinitely....Major defaulters and beneficiaries of loan write-offs, granted by both the Bhuttos and Sharif governments, included some of Pakistan's wealthiest business families-- Manshas, Saigols, Hashwanis, Habibs, Bhuttos and Sharifs......using the National Accountability Bureau (NAB), the (Musharraf) regime (after year 2000) went to prosecute eighteen hundred cases of corruption to recover nearly $3.4 billion in assets."

Sean Spicer lasted a mere half-year as the White House press secretary, but that was plenty long enough to mortify himself. He began with that kooky, laughable lie about the unprecedented size of President Trump’s inauguration crowd, and things didn’t pick up much from there. A punching bag for the administration, he became a punch line for much of America.

But who’s laughing now? Upon exiting his job he apparently had his pick of posh lecture-circuit agents, one of whom told Mike Allen of Axios that Spicer scoffed at the suggestion that he might be worth only $20,000 to $30,000 per speech, which is what other former press secretaries made. So he’ll presumably be bagging more than that for his first gig, scheduled to take place on Monday in front of an audience of investment bankers in Manhattan.

Oh, the juicy fruit of even an ephemeral fling with our fruitcake in chief. Ask Anthony Scaramucci. He was sent packing after just 10 profane and ignominious days as the White House communications director, and what do you suppose he did? Change his name and enter the political equivalent of witness protection? Retreat to a monastery for prayerful atonement until the shame dissipated?

No. The Mooch did not rechristen himself the Pooch, nor was there any penance. In lieu of a priest he found himself a publicist — a Hollywood bigwig whose list of clients includes the “Flip or Flop” star Tarek El Moussa, the singer Barry Manilow and the Jet Blue flight attendant who grabbed two frosty brews and waved a feisty adieu as he opened a mid-plane hatch and slid to freedom. Dignity lays little claim to many of the aides still in Trump’s employ. Why should it govern those in exile?

Corey Lewandowski, too. He didn’t have a particularly luminous résumé before Trump, and his year at the helm of Trump’s campaign was filled with fits of temper. He was even brought up on charges — later dropped — of manhandling a female journalist. But none of that hampered the swagger with which he opened his access-peddling, swamp-situated venture, Avenue Strategies. “A typical boutique lobbying firm might charge $10,000 to $15,000 a month,” my colleague Nicholas Confessore wrote about Avenue in The Times Magazine recently. “Avenue sometimes asked for as much as $50,000 a month.”

‘Over-invoicing by power companies’: PIL in Delhi HC seeks SIT probe against firmsThe Directorate of Revenue Intelligence (DRI) is currently investigating over a dozen firms, including firms of the Adani Group, Essar Group and Reliance ADAG Group, among others for alleged over valuation of Indonesian coal imports and power equipment imports between 2011 and 2015.

The NGOs, through senior advocate Prashant Bhushan, have alleged that some power firms are involved in “over-invoicing of about 400 per cent of power equipment and fuel in order to siphon off money to their promoter firms registered in tax havens and also in order to inflate electricity tariffs which are based on the cost of equipment and fuel”.“This is a very serious matter involving tens of thousands of crore. The CBI had registered a preliminary enquiry against some Adani Group firms, which was closed during the tenure of Ranjit Sinha, who is now being investigated by the SIT. Over-invoicing by these firms leads to taking more loans from banks than is required, cheating of consumers as higher tariffs are passed on to the consumers and cheating of shareholders of these firms as money is being siphoned off abroad,” Bhushan said.On Wednesday, Justice C Hari Shankar recused himself from hearing the case as he has appeared for some of the firms named in the petition in the past.

The counsel appearing for the Cabinet Secretariat, Government of India, said the government is opposing even the issuance of notice in the petition as it would “jeopardise the entire power sector.”The high court will now hear the case on September 20.According to the DRI, overvaluation of power equipment and coal has the effect of artificially raising the tariff values fixed by the Central Electricity Regulatory Commission or the respective state regulatory commissions.The DRI has alleged that several traders are directly importing Indonesian coal but the invoices are “routed through one or more related /associated intermediary firms based abroad” after artificially inflating its value. To justify the inflated price, “manipulated test reports” of the quality of coal is submitted to PSUs and Customs. This coal is then supplied to public power generation firms at the “artificially inflated import price and the inflated price is remitted from India to the intermediary firms abroad which remit only the actual price to the suppliers of the coal and the balance is siphoned off elsewhere”.

Former president General (retd) Pervez Musharraf disclosed that he had received millions of US dollars from Abdullah bin Abdulaziz Al Saud of Saudi Arabia back in 2009 to purchase apartments in London and Dubai.

In an interview with Nadeem Malik on Samaa TV, he claimed that he had received "financial assistance" from King Abdul Aziz back in 2009. However, Musharraf avoided to disclose the details, saying that it was a "private affair" so he would not go into details.

---------------

Musharraf claimed that no one can prove that he had purchased any property abroad while enjoying power in Pakistan. The former military ruler said that he used to deliver lectures abroad and receive payments ranging between $100,000 to $150,000 per lecture.

“I would be held accountable, if I had make property while being in power. But I went abroad in 2009 and then established the property in my individual capacity, so it is my private matter,” he said.

London [UK], Feb 5 (ANI): The United Kingdom Government has introduced new rules which gives the law enforcement officers sweeping powers to usurp assets and properties that have been accrued through "dirty money."

The new rules have been designed to stop corrupt people from using the UK as a safe haven to amass unaccounted wealth. Individuals can be fined and jailed if they make misleading statements.

British authorities have the right to freeze and recover properties of more than 50,000 pounds if individuals cannot give a genuine explanation on the source of the property and legal proof showing that they have acquired the property legally, The Dawn reported.

The UWO (Unexplained Wealth Order) that initially came into force on February 1, looked to target Russian businessmen and industrialists having assets in the UK. However, the new property law could, however, spell the same trouble for some Pakistani politicians.

Another issue that goes against Pakistani politicians is "the lower threshold as a UWO made in relation to a non-EEA [European Economic Area] PEP [Politically Exposed Person] would not require suspicion of serious criminality".

London-based anti-corruption group, Transparency International (TI) said that it has identified properties worth 4.4 billion pounds in the UK that can be taken up in the new legislation.

It has already prepared a list of five cases and feels that the investigation would not be delayed for long. This also includes the Avenfield House flats case, involving former Pakistan Prime Minister Nawaz Sharif.

Suspecting Sharif as the owner of four Avenfield House flats worth eight million pounds, TI said in a statement, "The Land Registry documents showing the four properties are owned by two companies registered in the British Virgin Islands- Nescoll Limited and Nielsen Limited.

"According to information published as part of Panama Papers, these companies were controlled by the former prime minister of Pakistan, Nawaz Sharif. In 2017, Pakistani authorities initiated an investigation into these assets, which found that they were purchased without a mortgage between 1993 and 1995, just after Sharif reported a growth in wealth without any plausible declared source of income. In July 2017, Sharif was removed from the office after the investigation found that he had failed to disclose these properties on his official asset declaration," added TI.

Igor Shuvalov, the Russian first deputy prime minister is the alleged owner of two flats worth 11.44 million pounds at 4 Whitehall Court in London.

Sharif is not the only politician to have links to a series properties in the UK.

Other media reports have mentioned that various Pakistani politicians have also purchased properties and amassed unaccounted wealth in the UK.

India's most wanted terrorist Dawood Ibrahim has been reportedly linked to a series of properties across the United Kingdom, according to a UK media report.

The UK newspaper compared the details from documents prepared by Indian authorities related to the records held by UK's Companies House, Land Registry and the Panama Papers.

The documents also alleged that Ibrahim's right-hand man, Muhammed Iqbal "Mirchi" Memon, amassed huge properties in the UK, such as hotels, mansions, and houses in South-East England.

Memon held at least 11 company directorships in tiling, construction and lettings firms in the UK before he died in 2013 after suffering a heart attack. He had consistently denied his involvement in Ibrahim's cartel.

Memon, also a suspect in the 1993 Mumbai attacks, had sought refuge in London after the blasts and attempts to extradite him to India had failed. He sought refuge in London after the 1993 Mumbai attacks. India has tried to extradite him but in vain.

For ousted prime minister Nawaz Sharif, defiance towards the judiciary may well seem like a road to an eventual political rehabilitation, but the writing on the wall is clear: His rule has definitively ended

By Farhan Bokhari, Special to Gulf NewsPublished: 17:01 February 24, 2018

A decision by Pakistan’s Supreme Court last week, to remove former prime minister Nawaz Sharif as head of the ruling party, must trigger further optimism for a nation where democracy is still taking root.

The ruling not only knocked out Sharif as leader of the Pakistan Muslim League-Nawaz (PML-N), a party created in his name, but the verdict also presented a powerful ray of hope for rule of law to finally take shape.

In Pakistan’s 70-year history, the citizens have become split into two categories on matters of law: Those who are law abiding and those who not only trample upon the law, but consider it their right to do so. Such reckless behaviour has fuelled what has widely come to be known as Pakistan’s crisis of governance, whose ill effects have seeped into every-day life.

It is no secret that Sharif, since his ouster last July, following a Supreme Court verdict, has repeatedly questioned that ruling. For him, being forced out on a Supreme Court verdict was blatantly unfair and struck at the heart of Pakistan’s democratic evolution. Some of his closest supporters even joined hands to publicly claim that the former prime minister became a victim of a grand conspiracy, possibly aimed at weakening the country’s democratic fabric.

Yet, beyond such rhetoric lies the powerful reality of the need to finally play by the rules.

The case against the former prime minister was triggered following revelations of large-scale unaccounted offshore wealth belonging to three of his children, which formed part of the so-called ‘Panama leaks’ — a comprehensive set of documents that was leaked from the offices of a Panama-based law firm. The revelations finally blew the lid off the dark world of secrecy that shrouded the Panama-based offshore bank accounts of the rich and wealthy the world over. For years, critics had pointed towards safe havens such as Panama where banks have zealously guarded the identity of their clients and their sources of wealth, irrespective of where those assets came from.

The global fallout from this saga put many to shame and brought about the downfall of figures like the Icelandic prime minister at the time. But Sharif chose to distance himself from the controversy by arguing that the wealth in his children’s name was legitimately earned from his family’s offshore businesses.

The outcome of the case, following a long-drawn trial in the country’s apex court, finally saw Sharif’s departure as prime minister last year. For the politically uninitiated, there are two aspects to the case that are excessively troubling.

Abraaj's Naqvi gave $20 million to #NawazSharif via middleman Navaid Malik for approval to sell #KElectric to #Shanghai Electric. “This document is explosive in the wrong hands. Abraaj and K-Electric shouldn’t be named in the document" #Pakistan https://www.wsj.com/articles/private-equity-firm-abraaj-raised-billions-pledging-to-do-goodthen-it-fell-apart-1539706575 via @WSJ

Around the same time, Abraaj was looking to sell its stake in K-Electric Ltd., the electricity provider to Karachi. Mr. Naqvi tried to secure the cooperation of Pakistan’s then-prime minister, Nawaz Sharif, and his brother Shehbaz, offering a $20 million payment to businessman Navaid Malik for his help in getting it, according to company emails and people familiar with the situation. The government owns a stake in K-Electric and its approval would be required for the sale to go through.

Shehbaz was “willing to give a strong endorsement” of the deal to Chinese bidders, Mr. Malik said, according to an October 2015 email to Mr. Naqvi from Abraaj partner Omar Lodhi. Mr. Malik said it was “important for him to share every detail with the brothers and get their blessings as well as their instructions as to how this money should be distributed,” such as “a portion to charity” or “a portion to the election fund kitty,” Mr. Lodhi wrote in the email.

When Mr. Naqvi emailed Mr. Lodhi about the $20 million contract for Mr. Malik in June 2016, he wrote, “This document is explosive in the wrong hands.” Abraaj and K-Electric shouldn’t be named in the document, he wrote: “Keep it generic.”

The Make or Break Battle of #Pakistan Between #Islamabad and #Sind by @SSEHBAI1. #Zardari's free-for-all party, nay an orgy, on state account and all were enjoying as if they would never be caught. #PPP #Corruption #fakeaccounts #MoneyLaundering https://www.siasat.pk/forums/threads/the-make-or-break-battle-of-pakistan-between-islamabad-and-sind-an-excellent-write-up-by-shaheen-sehbai.667922/ Feeling confident, though politically cut to afraction of what BB’s PPP once looked like,Zardari went on a spree in the spheres thathe still controlled --- Sindh Government,some banks and industrial units he hadcreated as part of the master plan of hismoney laundering scheme, many front men,even rickshaw drivers and ice creamvendors.The JIT has detailed the flow of moneyfrom one end to the other, with bankaccounts, vouchers, subsidies to his ownindustrial units and so on. The schemeexpanded in 4 to 5 years to a global networkthat had successfully stolen governmentfunds, hijacked projects and recycled theminto mega showpieces like the 64-storeyBahria skyscraper in Karachi, vast landsspreading on thousands of acres given toMalik Riaz, free palaces gifted to him inreturn and on and on. Even birthday cakeswere brought from fake accounts, as werelunches and dinners for Bilawal Houseresidents.

It was a free-for-all party, nay an orgy, onstate account and all were enjoying as if theywould never be caught.Luckily or unluckily for PPP, Panamahappened and the so far frustrated andalmost defeated establishment that alwayswanted to pounce on Nawaz and Zardari,found a platform they could put their toes on.Blunders and mistakes by Nawaz led tohis government and family sinking into thePanama whirlpool day by day until hisgovernment went down and his politicalfortunes drowned with the Imran Khanupsurge.Nawaz was becoming history but Zardariwas rejoicing as if he would have a freehand. Not so. Planners were waiting for thefirst big fish to be netted so that they couldthen go for the next one.With Nawaz gone, Zardari was next andthe tons of evidence that had already beengathered in years were waiting to be used.Zardari’s luck and tricks had eluded thesinkhole for way too long. No more.As soon as the Supreme Court found thatthe fake account cases could rope in Zardari,they decided to expand the probe and bring

in ISI and others. That was the momentmany had been waiting for years.The data that they had to collect wasalready with them, in raw shape, whichZardari had never allowed to be presented inany court.Quickly the JIT jumped on all the records,sent delegations abroad to confirm and tie uploose ends, grab those who had been usedas front men, many of whom were already intheir custody and had deposed like Lyari’sUzair Baloch, Anwar Majid and his family, DrAsim Hussain, Hussain Lawai and others.Tons of facts existed and had simply to becollated, confirmed and dots connected, T’sneeded to be crossed. Much of what the JITneeded was achieved quickly.When the report was sent in to SC in 26-volumes, it was a miraculous job.Zardari was expecting something nasty butnot a nuclear bomb like this.He went ballistic and was assured by paidand unpaid loyal attorneys that he should notpanic, as he will get time, like Nawaz.The PPP leadership was then called in andasked to stand up. Shamelessly and almosthelplessly the leadership had no option but tobuckle in and start speaking for the criminals

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Cloudcade:

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43.5% of Indians, the highest percentage in the world, say they do not want to have a neighbor of a different race, according to a Washington Post report based on World's Values Survey.

About Pakistan, the report says that "although the country has a number of factors that coincide with racial intolerance – sectarian violence, its location in the least-tolerant region of the world, low economic and human development indices – only 6.5 percent of Pakistanis objected to a neighbor of a different race. This would appear to suggest Pakistanis are more racially tolerant than even the Germans or the Dutch".

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I am the Founder and President of PakAlumni Worldwide, a global social network for Pakistanis, South Asians and their friends. I also served as Chairman of the NEDians Convention 2007. In addition to being a South Asia watcher, an investor, business consultant and avid follower of the world financial markets, I have more than 25 years experience in the hi-tech industry. I have been on the faculties of Rutgers University and NED Engineering University and cofounded two high-tech startups, Cautella, Inc. and DynArray Corp and managed multi-million dollar P&Ls. I am a pioneer of the PC and mobile businesses and I have held senior management positions in hardware and software development of Intel’s microprocessor product line from 8086 to Pentium processors. My experience includes senior roles in marketing, engineering and business management. I was recognized as “Person of the Year” by PC Magazine for my contribution to 80386 program. I have an MS degree in Electrical engineering from the New Jersey Institute of Technology.
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